Key insights
- The author suggests diversifying away from AI-related stocks, highlighting growth opportunities in internet advertising (RDDT), Latin American fintech (NU, MELI), and American fintech (FIGR). They believe concerns about macro headwinds and profitability for NU and MELI are overblown, and FIGR's growth is impressive. This suggests potential opportunities outside the dominant AI narrative, with a moderately bullish outlook for the mentioned stocks.
I think the AI trade is nearing a peak and want to diversify. There's this crazy narrative in the market that AI is the only source of growth but I don't think that's true.
A few I like:
- Internet Advertising: APP and RDDT show that you don't have to be Meta to put up monster ad revenue growth and neither show any signs of slowing down
- Latam: NU and MELI are both down on macro and near term profitability concerns that are very overblown. Meanwhile the growth engine at both is not slowing. The macro picture will clear up eventually and margins will expand again for Meli. Also the credit profile risk for Nu will be shown to be a non-issue. The next year or two should be great for both.
-American Fintech: FIGR just had a monster quarter. Sequential growth QoQ when cyclicality says origination should be down and YoY growth of 100%. I don't care if not 100% of operations are on 'blockchain'. They are getting there and doing something right to be originating this much volume.